Archive for July, 2011

In light of recent developments, I have stopped posting links to articles at the WSJ, or at any other News Corporation media outlet. This change is being made for obvious reasons, and until further notice.

If the single-family house has become a dog of an investment, what should communities do? I’d say this trend makes the case for developing a new generation of limited-equity (LE) neighborhoods, where the commitment benefits of ownership are separated from the mad lottery of house prices. Neighborhoods need stakeholders, not just tenants. (Hold your fire: I still rent.) Healthy communities require a critical mass of residents who have made temporal, legal, and financial commitments to remain. They require the political landscape that comes with the presence of enough people for whom it would be more trouble to move than it would be to notice and address local problems.

LE offers this: Cooperators buy shares in a stock company, and the company holds title to the real estate. Typically, starting prices for units are scaled to the pro rata costs of sinking the initial investment: basically, land and construction loans. When a cooperator moves out, he sells his unit to a new cooperator for roughly the same amount that he initially paid. And so, you have a cycle where cooperators who move out will recover their limited equity, and new residents will purchase housing at an affordable price. At the same time, ongoing maintenance costs are used to cover, well, maintenance costs. And taxes. Construction on cheap farmland or (clean) former industrial sites can significantly reduce property costs, making an LE venture an affordable possibility for cooperators with modest incomes. And so, you have a community of stakeholders that overlaps with a community of affordable housing.

The essence of the LE model can be traced back to the Principles of the Rochdale Weavers. In 1898, Ebenezer Howard proposed an LE model for his Garden Cities as a viable solution to the crowding and poverty that characterized the East End industrial slums of Victorian London. In 1902, Theodor Herzl advocated a similar financial model to pay for the founding of Israel. In the United States, labor-sponsored co-ops in New York City became the most ambitious examples of the limited-equity arrangement. But over the last generation, LE has faded out. In the only American locality where the ownership structure had ever gained a foothold, the build-out of affordable land in New York City, combined with the infamous dysfunction of Co-op City, effectively killed the prospect of further LE developments by the mid-1970s. (The 1971 death of Abraham Kazan simultaneously cost the concept its greatest advocate.) Presumably, most of the rest of the US was either too conservative, or too affordable during the post-war period, for such an idea to catch fire without a good sales pitch.

But limited equity housing remains a decent and practical idea, and the present flight of capital from urban land could open a new window for its economic viability. Politically, although LE is unquestionably a creature of the labor-left, it inherently dovetails with a number of fundamental conservative priorities, making it potentially palatable in non-left political landscapes. For example:

1. LE facilitates a broader base of private property ownership.

2. LE does not require any direct involvement by the State.

3. The LE entity is typically entirely local; by-laws can reflect local customs.

This is because LE was envisioned to work within the conservative, common-law legal system of the British Empire in the latter half of the 19th century. Rather than being a plank of a political program, it was and is a simple legal strategy. And because of its origin as a private law device, the LE model remains perfectly compatible with even the most conservative visions of the role of the State, as relates to property and economics. At the same time, the LE model can effectively advance the interests of those who require a degree of shelter from the vagaries of capital, by allowing individuals to enjoy a stable ownership stake in their homes and neighborhoods while maintaining a perpetual stock of affordable units in a fixed location. That is to say, in addition to its direct benefits as a business model, LE offers an approach that can avoid some of the triggers of political hostility while delivering a reliably equitable, even progressive social result. This quality would make LE a promising strategy for these uncertain political and economic times.

New Jersey Future presents a concise digest of a sobering new report by researchers at Rowan University, concerning the land use patterns of New Jersey since 1970. The report finds modest support for a positive impact from the Mount Laurel doctrine, but an overall increase in both exclusionary zoning policies and inefficient land use patterns. The report also finds a growing separation between the locations of housing and employment opportunities in Monmouth and Somerset, a trend that foreshadows more wasted resources and greater traffic congestion. This is not how the state should be developed.

For the last generation, Mexican migration to the United States has been one of the strongest factors driving neighborhood change, labor markets, and housing demand in American cities from California to New Jersey. Now the Times has a report, riffing off of research by Princeton’s Douglas Massey, that suggests that the long era characterized by heavy migration from Mexico may be coming to a close. If the trend is real, it will be interesting to examine how U.S. urban development is influenced by this change over the next several years.

More than a dozen small towns dot the countryside of New York’s Mohawk Valley between Albany and Utica. In most, compact urban neighborhoods give way at their edges to farmland and forests: That is to say, the towns of this region still furnish the contrast between efficient development and pastoral nature that was blurred by the sprawling postwar model. Internally, a few are near perfect examples of artful, practical town plans.

I like the physical layouts of Little Falls and Canajoharie, in particular: Both are river towns, built on steep banks, with winding streets worked into the rough topography of the land. Both have very good surviving stocks of Victorian architecture– including factories, simple houses, and showcases– arranged around the common spaces that traditionally organized settlements in the Northeast. And both are, essentially, walkable time capsules. On a recent drive home from from the Adirondacks, I took some photos of these towns.

A slide show, here:

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The Mohawk Valley has been settled for as long as nearby parts of New England. Visually, the region’s mountainous terrain casts a haunting daylight shade over certain twists in the river. The valley is largely forgotten by its former industries, and remains mostly undiscovered by sprawl developers or New York City vacationers. Notably, an Amtrak line that runs through the valley skips over the entire stretch between Amsterdam and Utica without a stop.

The development patterns of the smaller, most isolated Mohawk Valley towns reflect the old urban elements of the early-industrial, pre-automobile constellation. In particular, the influence of traditions, building codes, physical restraints, and market forces can be observed through the architecture, street layouts, and walkable accommodations of both topography and transportation routes in both towns. Historically, the the instrumentalities that linked these places with the wider world were the Mohawk River, Erie Canal, and N.Y. Central Railroad (in that order). From the maps of Little Falls and Canajoharie, it is apparent that the nodes of development were sited in proximity to these routes, and to meet the challenges posed by the rough topography on either side of the river. Similar evidence could still be found today in more developed regions, but the persistence of the Mohawk towns in the original matrix of a rural countryside allows much evidence of the early functionality of their patterns to be preserved. (Note the similar street patterns of the river towns along the lower Hudson, here, as they existed in 1906.)

A Google satellite map of Little Falls is here:

And one of Canajoharie:

One tradition worth noting in both towns is the presence of an open public space near the town center. In Little Falls, two separate greens characterize the upland neighborhood just north of the river, in the tradition of English town planning. Interestingly, the geometric convergence of several streets around a wide swath of pavement in Canajoharie is (in its current form) more reminiscent of a Continental plaza.